Development finance statistics

The 0.7% ODA/GNI target - a history

In 1970, The 0.7% ODA/GNI target was first agreed and has been repeatedly re-endorsed at the highest level at international aid and development conferences:

in 2005, the 15 countries that were members of the European Union by 2004 agreed to reach the target by 2015

the 0.7% target served as a reference for 2005 political commitments to increase ODA from the EU, the G8 Gleneagles Summit and the UN World Summit

Looking back...

In 1958, discussions of official aid targets were based on total flow of both official and private resources going to developing countries. A target of 1% was first suggested by the World Council of Churches and during the 1960s all DAC members subscribed to it. But it had a major flaw: governments cannot control or predict private capital flows, nor can they adjust official flows to compensate for fluctuations in private flows. Efforts to correct this concentrated on elaborating a sub-target for official flows.

A target of official flows of 0.75% of gross national product was proposed to be reached by 1972, based on work by Nobel-Prize winning Jan Tinbergen, who estimated the inflows required for developing economies to achieve desirable growth rates.

In 1969, the Pearson Commission – in its report Partners in Development – proposed a target of 0.7% of donor GNP to be reached “by 1975 and in no case later than 1980.” This suggestion was taken up in a UN resolution on 24 October 1970. The target built on the DAC’s 1969 definition of ODA.

DAC members generally accepted the 0.7% target for ODA, at least as a long-term objective, with some notable exceptions: Switzerland – not a member of the United Nations until 2002 – did not adopt the target, and the United States stated that it did not subscribe to specific targets or timetables, although it supported the more general aims of the Resolution.

With the revised System of National Accounts in 1993, gross national product was replaced by gross national income (GNI), an equivalent concept. DAC members’ performance against the 0.7% target is therefore now shown in terms of ODA/GNI ratios.